Texmaco Rail & Engineering Ltd is expecting to back to pre-pandemic levels of business by Q4 FY21, backed by growth in rolling stocks, EPC vertical and foundry business.

The company is looking to diversify into the services segment, primarily in areas such as track maintenance. It is also in the process of finalising strategy in the area of urban mobility. Plans are also afoot to ramp up its exports as a part of its strategy to de-risk itself.

Texmaco Rail, which currently has an order book of ₹3,400 crores, is chasing some “large tenders”, Ashish Gupta, Deputy Managing Director, Texmaco Rail & Engineering, told BusinessLine .

“We are likely to witness high growth in rolling stock business….there is a lot of potential. Our EPC business is also expected to be stable. We are chasing some large tenders,” Gupta said.

The rolling stock accounts for nearly 40 per cent of the company’s total turnover, which stood at 1,689 crore in FY-21. EPC accounts for another 40 per cent, while the remaining 20 per cent comes from the foundry and other small business verticals.

The central government’s proposal to revitalise the railway segment would create significant opportunities for growth in rolling stocks, EPC segment and urban mobility business.

“With the emphasis of the government to make freight movement competitive, the requirements of railway wagons are looking up and expected to remain positive in the coming years. General Purpose Wagon Investment Scheme (GPWIS), permitting the private investment is likely to result in robust growth. Your Company thus has been able to make judicious split in catering to the requirements of both private and Indian Railways segment,” the company said in its latest annual report.

The Indian Railways has been transforming by investing heavily in infrastructure, including track infrastructure & systems, electrification. This would augur well for the rail EPC business, it said.

Diversification

The company expects the services segment to start opening up soon, which would enable it to further increase its footprint in the industry.

“We are preparing to diversify in to the services segment, primarily, in areas like track maintenance etc. We are also in the process of finalising our strategy in the area of urban mobility (metro),” he said.

The company would also explore new opportunities in the EPC business, especially in ballastless track laying with a clear focus on national high-speed rail and metro projects across the country.

Ramp up exports

Texmaco Rail is also in the process of ramping up exports de-risk its portfolio.

“We are extremely focused on exports of rolling stock to Africa and Bangladesh. With our previous experience in supplying to these geographies, we are well placed to tap into these markets,” he said.

Exports, which currently account for a minor share of the total turnover, is expected to grow to 10-15 per cent of the business in the next three to five years.

The company’s steel foundry business would also be focused on tapping the export markets. ‘

The focus on diversification both on the geographical front as well as the product portfolio would help boost the company’s profitability.

“We expect margins to improve further, especially interest costs should go down with better cost management. We expect better cash flows and operating margins during H2 of this financial year. We are also taking initiatives to improve our performance on the ESG front, which also help us to achieve efficiency improvement and better profitability,” he pointed out.

Related Topics